STI down 3.5% for week as BOJ, US GDP disappoint

THE two central bank meetings this week were supposed to be non-events - the US Federal Reserve was expected to keep interest rates steady while expressing caution about the state of the US economy, while the Bank of Japan was expected to announce more monetary stimulus to revive its flagging economy.

As it turned out, only the Fed followed the script which the market had written; the BOJ's decision to hold off from pumping more money came as a shock that gave traders the perfect opportunity to short the market - again.

The outcome was that the Straits Times Index weakened every day of the week, losing 102 points or 3.5 per cent in total to end the week at 2,838.52, including a 23.78-point drop on Friday.